By Tyler Durden at ZeroHedge
October was a historic month for McDonalds. While the investing public was already well aware that things are bad and getting worse when it comes to demand for the iconic hamburger following MCD's 30% plunge in Q3 profit, moments ago the troubled fast-food chain reported that in the first month of the fourth quarter it celebrated a tragic anniversary: one year of US comp store sales without a single increase, following a 1% drop in US October sales! This is the first time in history when MCD has anniversaried negative same store sales in the US.
And global MCD sales:
According to AP, "McDonald's Corp. says that a key global sales figure slipped 0.5 percent in October, with weakness in the U.S. and ongoing difficulties from a food-safety scandal in China weighing down its business. The world's biggest hamburger chain said Monday that the decline in global sales at locations open at least 13 months included a 1 percent drop in the U.S. and a 4.2 percent decline for the unit that includes the Asia-Pacific region, the Middle East and Africa. McDonald's APMEA division has been trying to bounce back since the summer, when a TV report in China showed workers at one of its suppliers repackaging meat that was alleged to be expired. The claim has not been publicly confirmed by the supplier or the government."
And while nobody can blame Asian consumers of MCD to be revolted based on finally learning what they are eating, the US "spin" that low-price consumers are simply migrating to such much higher priced venues as Chipotle, are quite ridiculous. For a better idea of what is causing the collapse in end demand for MCD a far better explanation may be the previously noted implosion in Millennial purchasing power, as well as the relentless surge in workers 55 and older...
... who are too busy working to be able to afford the McNuggets mystery meat.
Courtesy Tyler Durden, founder of ZeorHedge (EconMatters author archive here)
The views and opinions expressed herein are the author's own, and do not necessarily reflect those of EconMatters.
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